Fidelity Advantage Portfolio Fund - Fidelity Investments PDF
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ORSO Fidelity Advantage Portfolio Fund Annual Report December 2017 FIDELITY ADVANTAGE PORTFOLIO FUND YEAR ENDED 31ST DECEMBER 2017 ANNUAL REPORT Contents Pages Management and Administration 1 Report of the Investment Manager 2 – 7 Report of the Trustee to the Unitholders 8 Independent Auditor’s Report 9 – 12 Statement of Net Assets 13 – 26 Statement of Comprehensive Income 27 – 40 Statement of Changes in Net Assets Attributable to Unitholders 41 – 54 Statement of Cash Flows 55 – 68 Notes to the Financial Statements 69 – 135 Schedule of Investments (Unaudited) 136 – 187 Investment Portfolio Movements (Unaudited) 188 – 201 Performance Table (Unaudited) 202 – 207 FIDELITY ADVANTAGE PORTFOLIO FUND YEAR ENDED 31ST DECEMBER 2017 ANNUAL REPORT Contents Pages Management and Administration 1 Report of the Investment Manager 2 – 7 Report of the Trustee to the Unitholders 8 Independent Auditor’s Report 9 – 12 Statement of Net Assets 13 – 26 Statement of Comprehensive Income 27 – 40 Statement of Changes in Net Assets Attributable to Unitholders 41 – 54 Statement of Cash Flows 55 – 68 Notes to the Financial Statements 69 – 135 Schedule of Investments (Unaudited) 136 – 187 Investment Portfolio Movements (Unaudited) 188 – 201 Performance Table (Unaudited) 202 – 207 FIDELITY ADVANTAGE PORTFOLIO FUND 1 FIDELITY ADVANTAGE PORTFOLIO FUND 2 YEAR ENDED 31ST DECEMBER 2017 YEAR ENDED 31ST DECEMBER 2017 REPORT OF THE INVESTMENT MANAGER MANAGEMENT AND ADMINISTRATION Annual Report Investment Manager As at 31st December 2017 FIL Investment Management (Hong Kong) Limited This Annual Report does not constitute an offer of units. Units are offered on the basis of the Level 21, Two Pacific Place, information contained in the current Explanatory Memorandum (and the documents referred 88 Queensway, to within it). Copies of the current Explanatory Memorandum and latest annual report for the Admiralty, Hong Kong Fund are available from the registered office of the Investment Manager or from any of the companies registered as distributors of the Fidelity Advantage Portfolio Fund. Trustee and Registrar HSBC Institutional Trust Services (Asia) Limited 1 Queen’s Road Central Hong Kong Auditor PricewaterhouseCoopers 22nd Floor, Prince’s Building, Central, Hong Kong Legal Advisers Deacons 5th Floor Alexandra House 18 Chater Road Central Hong Kong FIDELITY ADVANTAGE PORTFOLIO FUND 2 YEAR ENDED 31ST DECEMBER 2017 REPORT OF THE INVESTMENT MANAGER Annual Report As at 31st December 2017 This Annual Report does not constitute an offer of units. Units are offered on the basis of the information contained in the current Explanatory Memorandum (and the documents referred to within it). Copies of the current Explanatory Memorandum and latest annual report for the Fund are available from the registered office of the Investment Manager or from any of the companies registered as distributors of the Fidelity Advantage Portfolio Fund. FIDELITY ADVANTAGE PORTFOLIO FUND 3 FIDELITY ADVANTAGE PORTFOLIO FUND 4 YEAR ENDED 31ST DECEMBER 2017 YEAR ENDED 31ST DECEMBER 2017 REPORT OF THE INVESTMENT MANAGER REPORT OF THE INVESTMENT MANAGER 2017 Global Market Review – Consolidated Manager Report 2017 Global Market Review – Consolidated Manager Report (Continued) United States Japan US equities rose over the review period, supported by the successful passage of the tax reform Japanese equities rose strongly in local currency terms over the year, backed by upbeat bill, robust economic data, strong corporate earnings and interest rate increases by the US corporate earnings results, easing political concerns and a steady flow of positive economic Federal Reserve (Fed). Most sectors generated positive returns, with information technology data. Prime Minister Shinzo Abe’s landslide victory in the snap general election held in late (IT), materials and consumer discretionary leading the market. During the review period, the October provided further momentum amid hopes of a continuation of Abenomics (economic Fed increased its benchmark interest rate thrice, in March 2017, June 2017 and December policies advocated by Abe). Stocks started the year on a positive note amid robust global 2017, by a total of three-quarters of a percentage point. The interest rate now ranges between macroeconomic indicators and upbeat corporate earnings results. Expectations that the Trump 1.25% and 1.50%. This is in line with an earlier indication of three interest rate rises in 2017. administration’s reflationary policies would boost US and global growth also supported gains. The Fed also announced that Jerome Powell will take over as the new Chairperson in February However, sentiment waned as mounting concerns about external political risks put upward 2018, when Janet Yellen’s term ends. pressure on the yen. Equities rebounded from mid-April as upbeat earnings results, easing political concerns and a steady flow of positive economic data spurred gains. Investor Europe confidence increased as a combination of export, domestic, defensive and commodity related European equities posted strong positive returns over the 12-month period ending December companies contributed to a pickup in earnings growth. Meanwhile, attractive relative valuations 2017. Markets started the period on a positive note, as strong economic data from the and healthy growth momentum supported inflows from overseas investors. There were periods eurozone and prospects of pro-growth policies by US President Donald Trump's government of diminished risk sentiment owing to North Korea’s ballistic missile launches and boosted investor sentiment. Equities were also supported by the Dutch election results, where accompanying political rhetoric. The strong rise in Japanese markets in 2017 was also backed voters rejected a populist candidate. The victory of centrist candidate Emmanuel Macron in the by two US-related factors; the sharp rise in US long-term rates and a stronger US dollar. In French presidential election in May 2017 helped reduce political risk in Europe, which further terms of style, growth companies outperformed value stocks, while smaller companies supported equities. However, there was some volatility in June as investors misinterpreted performed better than their larger peers, given their greater exposure to domestic growth and European Central Bank (ECB) President Mario Draghi’s remarks on economic expansion and strong earnings profile. From a sector perspective, renewed growth optimism was reflected in easing deflationary pressures as a sign that the central bank would reduce monetary stimulus. the strong performance of the more cyclical segments of the market, such as resources, The ECB later clarified that it would retain its accommodative monetary policy stance. Markets technology and industrials. Conversely, defensive stocks, led by utilities and were volatile at the start of the third quarter of 2017 due to rising geopolitical tensions, but telecommunications, lagged the broader market. rebounded in September as macroeconomic data and surveys confirmed the momentum in the economic recovery. The year ended on a positive note, driven by the ECB’s continued Pacific ex Japan accommodative monetary policy stance, strong corporate earnings and sustained global Asia Pacific ex Japan equities gained in 2017 as well-synchronised global economic growth economic growth. Furthermore, the passage of the US tax reform bill boosted investor boosted sentiment and outweighed geopolitical concerns. Chinese equities gained amid signs sentiment. All sectors posted positive returns, with cyclicals outperforming defensives. IT, of economic stabilisation and progress towards structural reforms. At the 19th Congress of the materials and industrials were the top performing sectors, while telecommunication services, Communist Party of China, which takes place twice a decade, President Xi Jinping focused on energy and health care stocks underperformed the broader market. supply side reforms, the “Belt and Road” initiative, overcapacity cuts, broadening urbanisation and deleveraging state-owned enterprises to stimulate economic growth. GDP growth ticked Japan up to 6.9% year-on-year in 2017, the first annual acceleration in growth since 2010. The Indian Japanese equities rose strongly in local currency terms over the year, backed by upbeat market rose as investors were positive about the implementation of the Goods and Services corporate earnings results, easing political concerns and a steady flow of positive economic Tax (GST) regime. Global rating agency Moody’s upgraded India’s sovereign credit rating in data. Prime Minister Shinzo Abe’s landslide victory in the snap general election held in late view of progress on reforms. Investor interest in IT companies supported the Taiwanese and October provided further momentum amid hopes of a continuation of Abenomics (economic South Korean markets. In South Korea, sentiment received further support on expectations of policies advocated by Abe). Stocks started the year on a positive note amid robust global an improvement in ties with China, and as the new president announced measures to boost macroeconomic indicators and upbeat corporate earnings results. Expectations that the Trump growth. In Australia, gains in IT and commodity-related stocks led the market higher. Banks, administration’s reflationary policies would boost US and global growth also supported gains. however, lagged the broader market as the introduction of a new tax on large banks worried However, sentiment waned as mounting concerns about external political risks put upward investors. Credit rating agencies Standard & Poor’s and Moody’s also downgraded ratings for pressure on the yen. Equities rebounded from mid-April as upbeat earnings results, easing several financial institutions, citing risks associated with the housing market. The Philippines political concerns and a steady flow of positive economic data spurred gains. Investor and Indonesian markets gained, as their sovereign credit ratings were upgraded. Thai equities confidence increased as a combination of export, domestic, defensive and commodity related rose amid signs of an improvement in political stability. Singaporean and Malaysian equities companies contributed to a pickup in earnings growth. Meanwhile, attractive relative valuations also benefited from positive sentiment. All sectors in Asia Pacific ex Japan ended higher. IT and healthy growth momentum supported inflows from overseas investors. There were periods and real estate led gains. Materials tracked metal prices higher. The energy sector benefited of diminished risk sentiment owing to North Korea’s ballistic missile launches and from higher crude oil prices as major oil producing nations extended production curbs to accompanying political rhetoric. The strong rise in Japanese markets in 2017 was also backed address the global supply glut. by two US-related factors; the sharp rise in US long-term rates and a stronger US dollar. In terms of style, growth companies outperformed value stocks, while FIDELITY ADVANTAGE PORTFOLIO FUND 4 YEAR ENDED 31ST DECEMBER 2017 REPORT OF THE INVESTMENT MANAGER 2017 Global Market Review – Consolidated Manager Report (Continued) Japan Japanese equities rose strongly in local currency terms over the year, backed by upbeat corporate earnings results, easing political concerns and a steady flow of positive economic data. Prime Minister Shinzo Abe’s landslide victory in the snap general election held in late October provided further momentum amid hopes of a continuation of Abenomics (economic policies advocated by Abe). Stocks started the year on a positive note amid robust global macroeconomic indicators and upbeat corporate earnings results. Expectations that the Trump administration’s reflationary policies would boost US and global growth also supported gains. However, sentiment waned as mounting concerns about external political risks put upward pressure on the yen. Equities rebounded from mid-April as upbeat earnings results, easing political concerns and a steady flow of positive economic data spurred gains. Investor confidence increased as a combination of export, domestic, defensive and commodity related companies contributed to a pickup in earnings growth. Meanwhile, attractive relative valuations and healthy growth momentum supported inflows from overseas investors. There were periods of diminished risk sentiment owing to North Korea’s ballistic missile launches and accompanying political rhetoric. The strong rise in Japanese markets in 2017 was also backed by two US-related factors; the sharp rise in US long-term rates and a stronger US dollar. In terms of style, growth companies outperformed value stocks, while smaller companies performed better than their larger peers, given their greater exposure to domestic growth and strong earnings profile. From a sector perspective, renewed growth optimism was reflected in the strong performance of the more cyclical segments of the market, such as resources, technology and industrials. Conversely, defensive stocks, led by utilities and telecommunications, lagged the broader market. Pacific ex Japan Asia Pacific ex Japan equities gained in 2017 as well-synchronised global economic growth boosted sentiment and outweighed geopolitical concerns. Chinese equities gained amid signs of economic stabilisation and progress towards structural reforms. At the 19th Congress of the Communist Party of China, which takes place twice a decade, President Xi Jinping focused on supply side reforms, the “Belt and Road” initiative, overcapacity cuts, broadening urbanisation and deleveraging state-owned enterprises to stimulate economic growth. GDP growth ticked up to 6.9% year-on-year in 2017, the first annual acceleration in growth since 2010. The Indian market rose as investors were positive about the implementation of the Goods and Services Tax (GST) regime. Global rating agency Moody’s upgraded India’s sovereign credit rating in view of progress on reforms. Investor interest in IT companies supported the Taiwanese and South Korean markets. In South Korea, sentiment received further support on expectations of an improvement in ties with China, and as the new president announced measures to boost growth. In Australia, gains in IT and commodity-related stocks led the market higher. Banks, however, lagged the broader market as the introduction of a new tax on large banks worried investors. Credit rating agencies Standard & Poor’s and Moody’s also downgraded ratings for several financial institutions, citing risks associated with the housing market. The Philippines and Indonesian markets gained, as their sovereign credit ratings were upgraded. Thai equities rose amid signs of an improvement in political stability. Singaporean and Malaysian equities also benefited from positive sentiment. All sectors in Asia Pacific ex Japan ended higher. IT and real estate led gains. Materials tracked metal prices higher. The energy sector benefited from higher crude oil prices as major oil producing nations extended production curbs to address the global supply glut. FIDELITY ADVANTAGE PORTFOLIO FUND 6 YEAR ENDED 31ST DECEMBER 2017 REPORT OF THE INVESTMENT MANAGER Cumulative Total Returns NAV to NAV (in %, in Fund Currency) as at 31st December 2017 Fund Name Fund Class 6 Months 1 Year Since Launch Asia Pacific Equity Fund Ordinary 14.45 35.05 195.50 Administration 14.25 34.43 180.70 Savings 14.20 34.38 179.10 Balanced Fund Ordinary 10.77 23.38 380.20 Administration 10.49 22.81 333.90 Savings 10.49 22.78 208.30 Capital Stable Fund Ordinary 6.24 13.92 257.60 Administration 5.97 13.37 223.00 Savings 5.95 13.33 133.94 Fidelity Advantage Portfolio Fund - Ordinary 14.45 42.32 155.90 Invesco Asian Equity Fund Administration 14.17 41.73 142.50 Savings 14.16 41.66 141.10 Fidelity Advantage Portfolio Fund - Ordinary 16.90 38.69 138.00 Tracker Fund Portfolio Administration 16.60 38.09 125.50 Savings 16.59 37.97 124.20 Global Equity Fund Ordinary 9.20 20.06 199.20 Administration 8.94 19.53 180.30 Savings 8.92 19.44 178.30 Growth Fund Ordinary 13.05 28.21 430.90 Administration 12.79 27.62 379.60 Savings 12.77 27.58 242.69 HK Dollar Money Fund Ordinary 0.18 0.36 34.42 Administration 0.17 0.34 28.66 Savings 0.16 0.33 11.76 Hong Kong Bond Fund Ordinary 0.01 3.80 41.36 Administration -0.21 3.32 32.42 Savings -0.24 3.27 31.46 Hong Kong Equity Fund Ordinary 19.15 42.68 442.52 Administration 18.88 42.03 408.22 Savings 18.85 41.96 404.56 RMB Bond Fund Ordinary 4.55 9.31 5.57 Administration 4.30 8.82 4.49 Savings 4.28 8.78 4.37 Stable Growth Fund Ordinary 8.57 18.83 216.87 Administration 8.31 18.29 189.27 Savings 8.30 18.22 173.35 US Dollar Money Fund Ordinary 0.43 0.67 64.80 Administration 0.44 0.70 58.30 Savings 0.45 0.70 19.58 World Bond Fund Ordinary 3.14 8.16 64.40 Administration 2.94 7.69 54.00 Savings 2.89 7.59 53.00 FIDELITY ADVANTAGE PORTFOLIO FUND 6 YEAR ENDED 31ST DECEMBER 2017 REPORT OF THE INVESTMENT MANAGER Cumulative Total Returns NAV to NAV (in %, in Fund Currency) as at 31st December 2017 Fund Name Fund Class 6 Months 1 Year Since Launch Asia Pacific Equity Fund Ordinary 14.45 35.05 195.50 Administration 14.25 34.43 180.70 Savings 14.20 34.38 179.10 Balanced Fund Ordinary 10.77 23.38 380.20 Administration 10.49 22.81 333.90 Savings 10.49 22.78 208.30 Capital Stable Fund Ordinary 6.24 13.92 257.60 Administration 5.97 13.37 223.00 Savings 5.95 13.33 133.94 Fidelity Advantage Portfolio Fund - Ordinary 14.45 42.32 155.90 Invesco Asian Equity Fund Administration 14.17 41.73 142.50 Savings 14.16 41.66 141.10 Fidelity Advantage Portfolio Fund - Ordinary 16.90 38.69 138.00 Tracker Fund Portfolio Administration 16.60 38.09 125.50 Savings 16.59 37.97 124.20 Global Equity Fund Ordinary 9.20 20.06 199.20 Administration 8.94 19.53 180.30 Savings 8.92 19.44 178.30 Growth Fund Ordinary 13.05 28.21 430.90 Administration 12.79 27.62 379.60 Savings 12.77 27.58 242.69 HK Dollar Money Fund Ordinary 0.18 0.36 34.42 Administration 0.17 0.34 28.66 Savings 0.16 0.33 11.76 Hong Kong Bond Fund Ordinary 0.01 3.80 41.36 Administration -0.21 3.32 32.42 Savings -0.24 3.27 31.46 Hong Kong Equity Fund Ordinary 19.15 42.68 442.52 Administration 18.88 42.03 408.22 Savings 18.85 41.96 404.56 RMB Bond Fund Ordinary 4.55 9.31 5.57 Administration 4.30 8.82 4.49 Savings 4.28 8.78 4.37 Stable Growth Fund Ordinary 8.57 18.83 216.87 Administration 8.31 18.29 189.27 Savings 8.30 18.22 173.35 US Dollar Money Fund Ordinary 0.43 0.67 64.80 Administration 0.44 0.70 58.30 Savings 0.45 0.70 19.58 World Bond Fund Ordinary 3.14 8.16 64.40 Administration 2.94 7.69 54.00 Savings 2.89 7.59 53.00 FIDELITY ADVANTAGE PORTFOLIO FUND 7 YEAR ENDED 31ST DECEMBER 2017 REPORT OF THE INVESTMENT MANAGER Asset Allocation Breakdown (in %) As at 31st December 2017 Equity Fund Bond Fund Money Cash Asia Fund Name HK Japanese Americas European HK Global Market & Pacific Fund(s) Others Asia Pacific Equity Fund 100.2 (0.2) Balanced Fund 25.7 10.1 9.8 15.4 14.0 2.3 17.7 5.2 (0.2) Capital Stable Fund 11.6 5.2 4.8 7.5 6.1 5.5 49.3 10.2 (0.2) Fidelity Advantage Portfolio Fund - Invesco Asian Equity Fund 99.8 0.2 Fidelity Advantage Portfolio Fund - Tracker Fund Portfolio 100.2 (0.2) Global Equity Fund 1.7 9.6 7.3 59.3 22.3 (0.2) Growth Fund 31.9 13.3 13.0 19.4 17.9 0.7 2.0 2.0 (0.2) HK Dollar Money Fund 99.5 0.5 Hong Kong Bond Fund 100.2 (0.2) Hong Kong Equity Fund 100.2 (0.2) RMB Bond Fund 100.2 (0.2) Stable Growth Fund 18.6 7.7 7.4 11.6 10.2 4.0 35.5 5.2 (0.2) US Dollar Money Fund 99.7 0.3 World Bond Fund 100.2 (0.2)
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